Aug. 20 (Bloomberg) -- Peru's government will employ thousands of townspeople to rebuild their homes destroyed by the country's worst earthquake in more than 30 years.

The reconstruction of roads and half a dozen towns on the south coast will create at least 8,000 jobs, Labor Minister Susana Pinilla said. The government has set up a 300 million soles ($95 million) fund to finance reconstruction.

About 80,000 people were left without shelter by the magnitude-8 quake on Aug. 15, killing at least 510 people and injuring 1,600 on the southern coast, according to the Civil Defense Agency. The quake happened in one of the world's most seismically active regions, where the Nazca and South American tectonic plates clash. The U.S. Geological Survey reported a magnitude 5.1 temblor at 5:23 p.m. New York time today.

The construction drive will spur demand for cement, bricks and steel, helping make up for a drop in asparagus harvests because of a lack of water and access to markets, said Hugo Perea, chief analyst at Banco BBVA Continental in Lima. Peru is the world's largest asparagus exporter.

``This will boost construction as the government has money to spend,'' Perea said in a phone interview. ``There won't be any major negative impact on Peru's economic growth this year.''

Caracas-based lender Corporacion Andina de Fomento authorized an immediate $300,000 loan to finance reconstruction, bank President Enrique Garcia told reporters in Lima today.

Relief Effort

The government will appoint someone on Aug. 22 to coordinate relief and reconstruction efforts, Peru's President Alan Garcia said today. Donor nations and relief agencies have pledged a total of $40 million.

``We need an autonomous authority responsible for rebuilding the affected areas, especially Pisco, which has been totally destroyed,'' Garcia told reporters in the southern port of Pisco.

Several coastal towns were flooded by the sea, adding to damage from the earthquake, Milo Stanojevich, the country director for relief agency CARE, said in a mobile-phone interview from the town of Canete. The quake blocked roads and toppled churches, schools, hospitals and some 34,000 homes.

``My parents and brothers are living in a tent and are receiving rations,'' Irene Ore, whose house in Canete collapsed last week, said in a phone interview from Lima. ``The people in the countryside are worse off as help isn't getting there.''

Gas Project

The quake didn't cause damage to steelworks, fishmeal, textile and power plants and Dallas-based Hunt Oil Co.'s $2.5 billion gas plant project, according to Scotiabank Peru. The southern coastal region accounts for 5 percent of Peru's $100 billion gross domestic product.

``Our workers have seen a lot of commotion, but we don't believe that the natural gas export project will be delayed,'' said Carlos del Solar, general manager of Hunt Oil in Peru.

In January, Hunt Oil awarded a $1.5 billion contract to Hoofddorp, Netherlands-based Chicago Bridge & Iron Co. to build the gas-processing plant. Hunt plans to supply gas to Mexico from the plant by mid-2010.

Buenos Aires-based Pluspetrol SA renewed pumping of natural gas from the Camisea gas fields to its plant in Pisco after a five-day shutdown, according to an e-mailed statement. The company's installations weren't damaged, Pluspetrol said. Hunt Oil is a 35 percent shareholder in the Camisea project.

Peru, where half the population of 27 million lives on $1 a day, has suffered three destructive earthquakes in the past decade. It's Latin America's seventh-largest economy.

The quake was the world's most powerful since a magnitude- 8.1 temblor struck off the Solomon Islands in April, triggering a tsunami that killed 54 people. The U.S. Geological Survey said last week's earthquake carried about as much energy as about 790 nuclear bombs.

To contact the reporters on this story: Alex Emery in Lima at aemery1@bloomberg.net;

Last Updated: August 20, 2007 21:39 EDT